[NEWS] Tether releases USDT reserve report, proportion of cash and cash equivalents increases

Tether, the developer and operator of the US dollar-backed stablecoin USDT, released its third quarter reserve report on the 31st. BDO, one of the world's top five independent accounting firms, prepared a certification to support the report. It shows a breakdown of assets held by Tether as of September 30, 2023.

BDO publishes Tether's reserve certifications every quarter. There is a delay of about one month between the end of the quarter and the publication of the report, but Tether is currently working on developing a system that will provide real-time audit reports in 2024.

According to the report, the proportion of cash and cash equivalents in USDT's reserves reached a record high of 85.7%. The majority of this was revealed to be in US Treasury bills. Direct and indirect exposure is $72.6 billion (approximately 11 trillion yen).

The report also highlighted that the amount of secured loans provided by Tether has decreased to $330 million (approximately 50 billion yen). The decrease in loans enhances Tether's credibility in managing financial assets prudently and underscores its commitment to transparency and accountability in the cryptocurrency space.

In order to manage its risk management strategy and the volatility of cryptocurrency market prices, the company also announced that its investments in cash and cash equivalents reached $1 billion.

At the same time, the company also revealed that its investments in research reached a total of $800 million through the third quarter of this year. It said that it invested about $670 million in the third quarter alone. This investment is not included as part of the reserve.

The reserve margin remains stable regardless of market fluctuations. Gold and Bitcoin (BTC) prices have recovered significantly, with gold stocks decreasing by $116 million and Bitcoin positions decreasing by $195 million. However, the increase in the price of gold and Bitcoin last month offset these declines.

The total consolidated assets of the entire Tether Group reached approximately $86.4 billion. Meanwhile, the total consolidated liabilities were approximately $83.2 billion. Of these, approximately $83.15 billion was related to crypto assets. Thus, the consolidated assets of the Tether Group exceed the consolidated liabilities by approximately $3.2 billion.

Tether also invests in sustainable energy, bitcoin mining, data, and P2P technology. These are not included in the reserve. Investments in these areas in the third quarter of 2023 reached approximately $668.9 million, bringing the cumulative total since the beginning of the year to more than $800 million.

Tether's goal is to use excess reserves and undistributed profits to reduce secured loans from the reserve and eventually bring them to zero. As of September 30, the bank had $3.2 billion in excess reserves, and secured loans, which are part of the USDT reserve, had fallen to $2 billion.

As of October 31, the bank had $4.2 billion in excess reserves, and secured loans had fallen to $900 million. Tether has been criticized for its secured loans, but the decline is accelerating.

Source:Report
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